Costco Wholesale (COST) PT Raised to $680 at DA Davidson, 'don’t anticipate a sharp decline, but perhaps a pause that refreshes'

DA Davidson analyst Michael Baker raised the price target on Costco Wholesale (NASDAQ: COST) to $680.00 (from $600.00) while maintaining a Neutral rating.

The analyst commented: "COST stock out-performed last year and has been an outperformer year to date in 2024 as well. That set a high bar and is likely contributing with the small sell off post results. With comps largely known, the stock typically moves on the quarterly results based on gross margin trends and the size of the EPS beat. But, after adjustments, EPS was slightly below consensus and gross margins were slightly below consensus as were operating profit dollars. Also, no mention of a membership fee increase may be seen as a catalyst lost. An acceleration in “core on core” gross margin gains, and strong ecommerce sales were positives. We doubt holders will panic, so we don’t anticipate a sharp decline, but perhaps a pause that refreshes. We maintain our NEUTRAL rating primarily on valuation. Our price target goes to $680 from $600 previously based on 40x our calendar 2025 EPS estimate."

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